Standard Oil Company of Texas v. Marshall

• Decision Date: 25 March 1959
• Docket Number: No. 17161.,17161.
• Citation: 265 F.2d 46
• Parties: STANDARD OIL COMPANY OF TEXAS and New Idria Mining & Chemical Company, Appellants, v. J. W. MARSHALL, d/b/a Marshall Pipe & Supply Company, et al., Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

265 F.2d 46 (1959)

STANDARD OIL COMPANY OF TEXAS and New Idria Mining & Chemical Company, Appellants, v. J. W. MARSHALL, d/b/a Marshall Pipe & Supply Company, et al., Appellee.

No. 17161.

United States Court of Appeals Fifth Circuit.

March 25, 1959.

COPYRIGHT MATERIAL OMITTED

J. C. Hutcheson, III, Houston, Tex., Lee Sellers, Wichita Falls, Tex., Nelson, Montgomery, Robertson & Sellers, Wichita Falls, Tex., Baker, Botts, Andrews & Shepherd, Houston, Tex., for appellant.

Henry D. Akin, Dallas, Tex., T. B. Coffield, J. M. Donald, Paul Donald, Donald & Donald, Bowie, Tex., Leachman, Gardere, Akin & Porter, Dallas, Tex., for appellees.

Before TUTTLE, JONES, and WISDOM, Circuit Judges.

WISDOM, Circuit Judge.

This appeal from an order dismissing the plaintiffs' suit turns on the nature of an action of trespass to try title and the characteristics of an oil payment in relation to the indispensability of payees as parties plaintiff in a suit by the mineral lessee for trespass to try title to the leasehold. In this case the joinder of absent payees as indispensable parties would oust the court of jurisdiction based on diversity of citizenship. We hold that the owner of an oil payment is not an indispensable party plaintiff in an action of trespass to try title.

I.

The dispute is over conflicting claims to the minerals under twelve acres of land in Montague County, Texas, on which a producing well is located.

Standard Oil of Texas, a Delaware corporation, and New Idria Mining and Chemical Company, a Nevada corporation, brought a diversity action in the usual form of a Texas suit for trespass to try title.¹ The plaintiffs allege that they are the owners of 7/8 of the oil, gas, and other minerals underlying the twelve acres in question; that this land is part of a larger tract in the East ½ of Block 1, League 12, Calhoun County School Lands, Montague County, Texas. They say that on August 29, 1956 they were in possession of the tract and engaged in drilling for oil when the defendants, J. W. Marshall and others, unlawfully entered upon the land, dispossessed the plaintiffs, and drilled a producing well. The plaintiffs ask for a judgment recognizing their title and possession. They ask also for an accounting for the oil produced, valued at $75,000 up to the time of the suit, and for damages for the conversion of the oil extracted.

The defendants claim the same twelve acres under a separate title in which the land in dispute is described as part of a tract situated in Block 6, Upper League 12, Calhoun County School Lands, Montague County, Texas.

Some time before April 27, 1956, Standard Oil of Texas obtained an oil and gas lease covering the land described as part of Block No. 1 Calhoun County School Land, Montague, Texas. Standard conveyed to C. L. Lloyd and L. F. Pitts, reserving an interest in the leasehold. April 27, 1956 Lloyd and Pitts assigned their lease to T. F. Vanderlaan. The assignment provided that besides a nominal consideration of ten dollars, Lloyd and Pitts were to receive two oil payments of $1,800,000 and $1,200,000, payable out of a fractional interest in the production reserved by the assignors.² When the oil payments reached the agreed amount, the reserved interest was to "terminate and * * * revert to and vest in Assignee, his heirs and assigns, without further instrument or conveyance." Vanderlaan assigned to Beaver Petroleum Corporation, subject to the reservations in the previous assignment. Beaver assigned to New Idria, subject to reservations in favor of Lloyd and Pitts and subject also to a "production payment interest" in the amount of $140,250 owned by Marvin Hayutin.

The defendants moved to dismiss the suit for lack of jurisdiction, basing their motion on Rule 19(a), Federal Rules of Civil Procedure, 28 U.S.C.A.³ They contend that Lloyd, Pitts, and Hayutin are indispensable parties since they own oil payments carved out of the leasehold. Lloyd and Pitts are citizens of Texas. Hayutin's residence was not known at the time suit was filed.

Standard and New Idria argue that as owners of undivided interests in the oil and gas underlying the tract they have the right to sue in trespass to try title without joining Lloyd and Pitts or other owners of interests in the minerals or interests in the land. They assert that owners of oil payments would not even be proper parties to the suit because, under the law of Texas, they lack the possessory interest necessary to maintain a suit for trespass to try title.

If the plaintiffs are in a dilemma, caught between the indispensability of the payees as parties, on the one horn, and the necessity of complete diversity of citizenship, on the other horn, the suit was properly dismissed.⁴

II.

The action of trespass to try title was introduced in Texas by the Act of February 5, 1840 "to abolish the senseless fictions of the English common law action of ejectment".⁵ The action is purely statutory.⁶ The proceeding accords a legal, as distinguished from an equitable remedy.⁷ It is not to be confused with a suit to quiet title or a suit to establish an interest in an oil and gas lease or a suit in equity for an injunction to restrain a defendant from trespassing.⁸

Two fundamental characteristics of the action of trespass to try title are important in this case.

First, although the suit is to try title, the proceeding is a possessory action⁹ for recovery of land possessed by a trespasser. "To maintain the action there should be a present legal right to possession with such title as renders the possession lawful. * * * The petition of plaintiff is required by the rules of court to state that he was in possession of the premises or entitled to possession thereof, which allegation must be proved. A right of possession is thus made an essential to the cause of action in trespass to try title."¹⁰ If the plaintiff shows possession, his own or a predecessor in title, prior to defendant's possession, and a regular chain of title connecting himself with such possession, the plaintiff establishes a prima facie title.¹¹ If the plaintiff's right of possession has not accrued at the time of trial, the action is premature.¹²

Second, it is settled in Texas that an owner of an undivided interest in land may bring suit in trespass to try title without joining the other part owners. "Proof of title to an undivided interest in a tract or survey will support a recovery of the entire parcel as against a stranger to the title. It follows that an action of trespass to try title may be maintained by one of several cotenants. Thus, as against a trespasser, the entire premises may be recovered by one who has taken a conveyance of a fractional interest in the property."¹³ "A tenant in common may maintain an action to recover the whole of the land from one having no title." Turnbow v. Richardson, Tex.Civ.App.1941, 149 S.W.2d 616. In a suit to recover title and possession, the plaintiff is not required even to make a mortgagee a party. Galveston, H. & S. A. R. Co. v. State, Tex.Civ.App.1896, 36 S.W. 111; Booty v. O'Connor, Tex.Civ. App.1928, 13 S.W.2d 220, affirmed Brooks v. O'Connor, 120 Tex. 121, 39 S.W.2d 22.

This Court has applied these principles on several occasions in diversity suits. In Murphy v. Sun Oil Company, 5 Cir., 1936, 86 F.2d 895, 896, Sun, as owner of the mineral leasehold, brought an action in trespass to try title without joining its lessor. Defendant moved to dismiss on the ground that Sun's lessor was an indispensable party plaintiff. Joining the lessor would have destroyed diversity of the citizenship. We held:

"As to the first point, the want of necessary parties, it is plain that appellant has overlooked the fact that this action is not in equity to remove cloud, but is at law to try title. In such an action one cotenant can sue for and recover title to the whole tract for the benefit of himself and his contenant, as against one having no title, and it is settled law in Texas that a lessor and lessee in an oil and gas lease are cotenants."

See McComb v. McCormack, 5 Cir., 1947, 159 F.2d 219.

In Humphrey v. Stanolind Oil & Gas Company, 5 Cir., 1956, 232 F.2d 925, 927, we held that fractional, nonparticipating royalty owners and warrantors of defendant's title, claiming under the same chain of title as the defendant, were not even conditionally necessary parties defendant in the sense that Rule 19(b), F.R.C.P., authorized the court to require their joinder when joinder would not oust the court of jurisdiction. This Court, reversing the district court, said:

"Appellee concedes that the rule in Texas and in the Federal Court is that persons claiming an individual interest in land may sue and be sued without joining others so claiming. It nevertheless, without citation of authority or, as we think, any sound reason, contends here that Rule 19(b) authorized the action taken. It does not in its motion allege, it does not claim here, or if it does, it does not point to any reason for so claiming, that the defendants it seeks to have made parties are such persons as `ought to be parties if complete relief is to be accorded between those already parties\'.

"It is apparently laboring under the impression that, for action under the rule, allegations merely that it would be desirable or useful to have as many claimants in the suit as possible * * *

"We cannot agree with this view."

See Mackintosh v. Marks' Estate, 5 Cir., 1955, 225 F.2d 211 and Estes v. Shell Oil Co., 5 Cir., 1956, 234 F.2d 847.

Defendants distinguish the Murphy case on the ground that the absent party was a lessor whose 1/8 interest would not be affected by litigation involving the 7/8 leasehold. We observe, however, that a lessor is a cotenant with the lessee, claims through the same chain of title, and shares in the risk of adverse litigation affecting title and possession. Defendants distinguish Humphrey v. Stanolind on several grounds: (1) that the absent parties had no such interest...